Building Business Credit
Business credit scores help lenders, suppliers and other creditors quickly evaluate whether a business will pay its bills on time. So, have you checked your Experian credit score lately?
How to Improve Your Business Credit Score:
Credit scores are complex statistical models for predicting credit risk. While there is no guaranteed way to improve a business credit score, here are a few steps you can take to ensure that your business credit report reflects the best score possible for your situation.
- Check your business credit report regularly and verify that all information is accurate and up-to-date.
- Be aware of companies that you establish credit with that report trade payment information to Experian. This can either help you or harm you. Remember, not all business creditors report their information to credit bureaus.
- Pay your creditors on time. Historical payment behavior, even with previous creditors plays a major role in calculating your business credit score.
How Business Credit Scores are Calculated:
Business credit scores range from 1 to 100, with 1 representing a high risk and 100 representing a low risk. Scores are based on a number of factors contained in your business credit report.
- Number of trade experiences
- Outstanding balances
- Payment habits
- Credit utilization
- Trends over time
- Public record: tax liens, judgments, bankruptcy -- recentcy, frequency and dollar amount
- Demographics - years on file, Standard Industrial Classification codes, and business size